Government still waiting for MHAs to repay money from constituency allowance spending scandal

The Labradorian

Published: Feb 15 at 8:29 p.m.

Updated: Feb 16 at 7:13 p.m.

John Hand is led to the St. John’s Lockup in this January 2011 photo after being sentenced to a three-year term for his role in the House of Assembly spending scandal. - -File photo

• In 2006, then auditor general John Noseworthy — after an examination of records reaching from 1989 to 2005-06 — reported massive overspending by some members of the House of Assembly (MHAs) under their constituency allowances, including $2.2 million in inappropriate claims. There were claims for donations, alcohol, double billings and personal items. There were millions more spent with inadequate documentation. Kilbride Tory MHA Ed Byrne was found to have overspent his allowance by $326,642 over two years. MHAs Wally Andersen, Randy Collins and Jim Walsh were also implicated in overspending. All four ended up criminally charged.

• In 2007, Noseworthy followed up, reporting on MHAs who double-billed their constituency allowances. He reported that in May 2004, each MHA received a payment of $2,875 for their allowance. It was a bonus lump sum above the regular allowance, and it did not require receipts. Only two of the 48 MHAs did not take that payment — former premier Danny Williams and former MHA Elizabeth Marshall.

• In 2009, during the corruption trial of former politician Jim Walsh, comptroller general Ron Williams said on the stand that the government was clawing back a portion of the pension payments from the four MHAs who overcharged their allowances. When asked which MHAs were subject to pension clawbacks, Williams said, “The MHAs that owe us money.”

• In 2010, civil servant Bill Murray was sent to federal prison with a two-year sentence for his part in the spending scandal. He was convicted of fraud and accepting bribes — admitting to accepting kickbacks from MHAs, falsifying financial reports to the House and funnelling public money to local companies selling gift items.

• Businessman John Hand was the owner/operator of companies selling items to MHAs, including key chains and pins, and ultimately pleaded guilty to charges of fraud and breach of probation.

• In 2013, The Telegram reported about $950,000 had been paid back as of September of that year, out of the more than $3 million that was supposed to be repaid from the scandal.

• In 2017, more than a decade after the auditor general’s original findings, The Telegram reported $1.19 million had been repaid. Another $2.7 million is outstanding.

• In 2017-18, there was another bit of progress, with $32,331 repaid in total (net). But notably, for at least the second year in a row, post-judgment interest was more than the amount paid in one case.

The next update on recovery should come with the next budget and Pubic Accounts.